GameStop (GME) Down 30%, What Happened To The Meme Stock Frenzy?

GameStop Corp. is an American video game, consumer electronics, and gaming merchandise retailer that has seen its share price slump as much as 30%. After the Thursday trading session, the gaming retailer’s stock is now priced at $27.67.

GameStop In Knockout Mode

GameStop reignited its bullish frenzy earlier this week with the re-emergence of Keith Gill (The Roaring Kitty) as known on X. Gill was one of the major masterminds behind the short squeeze of 2021. However, Gill went solo since that time only to resurface earlier this week.

His emergence served as a reference point for retail investors to pick up from where they left off in 2021. The rally extended to AMC Entertainment and other stocks that are heavily shorted by Wall Street firms. With the price action of GameStop thus far this week, the stock soared as high as $64.83, marking an 18-month high.

Despite the latest downturn in the GME trading ecosystem, the stock has retained over 53% over the past 5 days. Many market investors warned against over-exposure to GameStop on the basis of speculative trading.

Vanguard Chief Investment Officer (CIO) Gregory Davis resounded this warning as reported earlier by Coingape. As he said, the market has seen the hyped GameStop trend play out before and irrespective of the hype, it won’t last. He said GameStop might have soared, however, its financials, fundamentals and accounts remains the same.

He cautioned his followers that most times, those who places a bet on assets like GameStop usually end of becoming worse off. While it remains hard to determine whether or not the GameStop bearish turnaround marks the end of the hype cycle, the single day slump spells a major concern.

Market Shifting Away From Risk Assets

The bearish reversal in the share price of GameStop also mimics the general trend in the volatile asset sector. Cryptocurrencies including Bitcoin (BTC), Ethereum (ETH) and crypto-focused stocks like Coinbase also plunged hours ago.

This slump was recorded despite the major win scored at the United States Senate in repealing a major accounting rule. This rule – SAB 121 – as sponsored by the US SEC sought to prevent banks from holding Bitcoin. With a major Veto possible, investors have proven they are unenthusiastic about the win, yet.

This bearish sentiment has tickled down to other major risk assets like GameStop whose shares has dropped by an additional 2.89% in After Hours trading.

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